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Technology Stocks : TranSwitch Corp: Will they get Zenith Business?

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To: Bhag Karamchandani who wrote (198)6/11/1997 3:34:00 PM
From: Neal Neslusan   of 669
 
Hi Bhag,

I don't think you should think of CSCO and ASND as having ASIC subsidiaries. Rather you should look at their having purchased the companies in question as a move to gain IP that they find useful. In fact, in Cisco's case I'd bet they buy companies so that their competitors won't. The fact that the companies they bought here did ASIC's does not necessarily mean that they will no longer buy standard parts (like the ones TXCC makes). In fact, I don't think the two events are related. In particular with the Cisco purchase, if Skystone has the product I think they do then it was an easy purchase for Cisco because the purchase would stop Bay, 3COM, and Cabletron from getting access to this chip. It's really a great chip if it works.

As far as TXCC goes, the part that Skystone makes would go into the mid and high end routers/switches (like the 7K and 10K machines that Cisco makes). I think Cisco buys a chip that is targetted at a lower end Cisco machine.

Neal
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